New Jersey announces $225M Exxon settlement

David Porter and Michael Cataliniassociated Press

Published 6:24 am, Tuesday, March 10, 2015

NEWARK, N.J. — New Jersey announced a $225 million settlement with Exxon Mobil on Thursday that state officials said is the largest environmental settlement against a corporate defendant in state history — though it has been criticized by Democratic lawmakers who say it is for a mere fraction of the nearly $9 billion initially sought.

Acting Attorney General John J. Hoffman said the settlement over pollution at refinery sites in Linden and Bayonne is separate from Exxon Mobil’s obligation to clean up the sites at its own expense.

“This important settlement, which came about because this administration aggressively pushed the case to trial, is the result of long fought settlement negotiations that pre-dated and post-dated the trial,” Hoffman said in a statement.

New Jersey filed its lawsuit in 2004, claiming Irving, Texas-based Exxon Mobil’s petroleum refining plants in Linden and Bayonne fouled the land and water. The state sought $8.9 billion in damages.

Several years ago, a state judge ruled Exxon Mobil was liable for causing a public nuisance. A different judge heard evidence last year to determine damages but hadn’t decided on an amount. Attorneys for both sides asked in a letter last month that he refrain from ruling because a settlement was imminent, and on Feb. 20 notified him a settlement had been reached.

State Senate President Steve Sweeney and Sen. Ray Lesniak, both Democrats, had threatened to file a lawsuit objecting to the settlement, and Assembly Speaker Vincent Prieto said this week he would a hold hearing on the matter.

An Exxon spokesman said Thursday the company wouldn’t comment on the settlement.

The proposed settlement is expected to be published in the New Jersey Register on April 6, followed by a 30-day public comment period. A finalized settlement would then be forwarded to state Superior Court Judge Michael Hogan for approval.

How the state will spend the $225 million settlement is not clear, nor is the amount that Exxon will pay to clean up the site.

Hoffman said in Thursday’s statement that the money would be available in fiscal year 2016 at the earliest, and that it will be subject to the legislative budget process. If current law is preserved, that would mean the first $50 million of the settlement must go toward cleaning up the sites while the remainder could go into the state’s general fund. That provision became law for the 2015 budget year.

State Sen. Paul Sarlo, who chairs the budget committee, says he and Senate President Steve Sweeney will introduce legislation in the coming weeks to use the budget process to make sure money from environmental settlements is used for cleanup efforts.

Sarlo said his bill will require that 50 percent of the funds from settlements like the Exxon deal are used for environmental remediation and 50 percent go toward the general fund. Sarlo says the language is similar to what he wrote in last year’s budget but said Christie used his line-item veto to remove it.